Speculative Developement Round The Corner?

07/03/2014

As the new 82,000 sq ft Headquarters for Centrica on the Oxford Business Park nears completion we look anxiously to when the next commercial construction project might appear. There is still a good supply of office space throughout the County but whilst Grade A space is diminishing any new speculative development would be a brave move. We don’t foresee any new office development for at least another 18 -24 months in Central Oxfordshire areas but there are noises that Milton Park may embark on a further major office development which reflects the strength of their market with greater links to the Thames Valley and London via Didcot station. The announcement in October that Chiltern Railways new Oxford to Marylebone service has been finally approved with work likely to start in 2013 will undoubtedly be a catalyst for City Centre office development in the medium term.

A lack of stock is a more common theme in the industrial market with very few quality buildings or freehold premises available. As a consequence we are starting to see rental incentives reducing. Again Milton Park has blazed the trail with a new industrial scheme taking advantage of business rates relief due to Enterprise Zone status. Other speculative development is unlikely until developer confidence returns with bank finance availability and business rates liability on empty units being the two main barriers.

Demand levels remain low for 2012 but October did see a spike in new enquiries as businesses looked to make property decisions before the year end. This appears

to have been short lived and the phones have become quieter again although there are a number of larger office enquiries which could just create a bright start to 2013.